WASHINGTON — The Internal Revenue Service, concerned that some Build America Bonds are being sold to investors at prices that are too high, is urging municipal issuers to track the trading of their BABs through the Electronic Municipal Market Access system and to question underwriters about the pricing.
“The IRS is troubled when we see an upward trend in prices and that some apparently public purchasers are buying bonds at prices in excess of the initial offering price in what appears to be the primary market,” George E. Gurrola, an IRS tax law specialist in the agency’s tax-exempt bond office, told bond lawyers during a teleconference yesterday. “If this is indicated in the trading record for your BAB issue, an explanation should be sought.”
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